Business, 09.04.2020 22:00 Delgadojacky0206
In the economy of Panicia, the monetary base is $1,000. People hold a third of their money in the form of currency (and thus two-thirds as bank deposits). Banks hold a third of their deposits in reserve.
One day, fear about the banking system strikes the population, and people now want to hold a third of their money in the form of currency. If central bank does nothing, what is the new money supply?
Answers: 1
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